IMPHAL May 17: In the aftermath of the financial devastation caused by certain networks namely Visarev, Unipay, Forex ,Global Index Daily which had swindled crores from scores of investors from the state, the government has finally addressed the issue.
A notification of the Finance department signed by V K Dewangan, commissioner has informs the public that Prize chits or benefit schemes only give advantage to the promoters and do not serve any social purpose.
Thus, the so called Multi Level Marketing (MLM), though called by very attractive names squarely falls within the definition of `Money Circulation Scheme` under the act and hence prohibited by the Prize Chits and Money Circulation Schemes (Banning) (Manipur) Rules, 1978.
The notification says that the general public should avoid and not enroll themselves into these schemes as they not only destroy the economic fabric of the state but also the fiscal system of the country.
Further, it also informed that MLM schemes destroy the knitted social fabric of our society and therefore, the public should not associate themselves with such companies. Citing previous cases of the Supreme Court and various other courts issuing judgments against the MLM`™s which are camouflaged illegal money circulation schemes, it mentions cases of Amway vs State of Andhra Pradesh, FMCG vs State of Tamil Nadu etc and in these cases, the judgments`™ passed clearly states that these types of schemes are prejudicial to public interest and also adversely affects the efficacy of fiscal and monetary policy as siphoning of crores take place without accountability.
In this regard, the department of Financial Services, ministry of Finance, government of India has directed the Directorate of Enforcement and Central Economic Intelligence Bureau for taking up appropriate action against these major financial scams. The Central Economic Intelligence Bureau, in turn has directed state governments for taking up appropriate action.
Further, it states that the general public, government officials and others concerned that the specific provisions under Prize Chit and Money Circulation Schemes (Banning) (Manipur) RULES, 1978 and relevant sections under section 420 of the Indian Penal Code are available to be invoked and effectively check and prevent progress of such dubious floated companies.
The notice further mentioned that Section 3 of Prize Chits and Money Circulation Schemes (Banning) Act, 1978 bans such schemes or participation in such schemes. Section 4 and 5 are penal provisions and prescribe punishment. Section 6 deals with offences committed by such companies. Section 7 authorizes police officers not below the rank of OC to exercise power to enter and search premises and to seize things used for such schemes. Section 8 provides for forfeiture of newspaper and publication containing money circulation schemes. The Preamble of 1978 Act declares that it has been enacted `to ban the promotion or conduct of prize chits and money circulation schemes and for matters connected therewith and incidental thereto`, it added.
The notice mentions that the easy prey is the middle class and loses all their savings even at the cost of their blood relations, with their kith and kin also being victimized. The worst sufferers in such schemes are often unemployed youths who lose their time, health, wealth in the wild goose chase. Such schemes have ultimately destroyed a number of families and friendships, it said.